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Externalities in Conservation Economics

The document outlines questions and answers related to conservation economics, focusing on externalities in consumption and production. It includes scenarios for positive and negative externalities, with specific equations for social marginal cost (SMC) and social marginal benefit (SMB). The document also provides examples of externalities, such as loud noise from partying and loss of ecosystem services due to mining.

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312 views1 page

Externalities in Conservation Economics

The document outlines questions and answers related to conservation economics, focusing on externalities in consumption and production. It includes scenarios for positive and negative externalities, with specific equations for social marginal cost (SMC) and social marginal benefit (SMB). The document also provides examples of externalities, such as loud noise from partying and loss of ecosystem services due to mining.

Uploaded by

akarapunivasreddy141
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Conservation Economics: Week 8

The correct answers are in bold.

S. No. Question

1 For a positive consumption externality,


(a) SMC = PMC + MD
(b) SMC = PMC - MD
(c) SMC = PMC
(d) SMC = PMC - MB

2 For a positive production externality,


(a) SMC = PMC + MD
(b) SMC = PMC - MD
(c) SMC = PMC
(d) SMC = PMC - MB

3 For a negative consumption externality,


(a) SMB = PMB
(b) SMB = PMB − MD
(c) SMB = PMB + MB
(d) SMC = PMC / MD

4 For a negative production externality,


(a) SMC = PMC + MD
(b) SMC = PMC - MD
(c) SMC = PMC
(d) SMC = PMC - MB

5 Partying with loud noise is an example of


a. negative production externality
b. positive production externality
c. negative consumption externality
d. positive consumption externality

6 For a positive consumption externality,


(a) SMB = PMB
(b) SMB = PMB − MD
(c) SMB = PMB + MB
(d) SMC = PMC / MD

7 “When a firm’s production reduces the well-being of others who are not compensated by the
firm,” we have
a. negative production externality
b. positive production externality
c. negative consumption externality
d. positive consumption externality

8 “When an individual’s consumption reduces the well-being of others who are not compensated
by the individual,” we have
a. negative production externality
b. positive production externality
c. negative consumption externality
d. positive consumption externality

9 For a positive production externality,


(a) SMB = PMB
(b) SMB = PMB − MD
(c) SMB = PMB + MB
(d) SMC = PMC / MD

10 Loss of ecosystem services due to mining is an example of


a. negative production externality
b. positive production externality
c. negative consumption externality
d. positive consumption externality

Best wishes,

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